Brent Prices Make A Modest Comeback From Five Year Lows

Brent crude oil fell closer to last week’s five and a half year low to begin the week as investors continued to worry about the growing global supply glut. The commodity traded at $61.50 at 8:10 GMT as investors looked ahead to this week’s PMI data for any indication of a pick up in demand.

Last week, the International Energy Agency trimmed its forecast for global demand in 2015, citing a poor economic climate. The agency’s decision to reduce its expectations weighed heavily on Brent prices, which were already under a great deal of pressure due to OPEC’s decision not to make a production cut in November.

Over the weekend, the cartel’s head Abdullah al-Badri defended its decision to allow markets to set prices, saying that the current market weakness may be attributed to speculation rather than actual fundamentals. He also said the group’s decision against a cut was not motivated by the desire to undercut non-OPEC producers like the US and Russia, as many reports have claimed.

However, Reuters reported that Kuwait’s oil minister told reporters that the cartel’s decision to maintain production was made in order to gain market share. He said the group did not cut production in order to regain customers lost to non-OPEC producers, even if the decision translated into sharply lower prices.

Moving forward all eyes will be on PMI data from across the globe due out this week. The figures could help stem falling crude prices if they point to recovery in some of the world’s biggest consumers like China and Europe.